Gift / Prepaid / Reward Cards

There are several traps that target people selling gift cards.

In one scam, fraudsters pay you for a card (or the code on the card), but then dispute or cancel the charge after they have already used the gift card.

In another, they ask you to buy a bunch of gift cards in exchange for an item on an auction site—and then never actually send you the purchase.

To avoid becoming a victim, take several precautions when you use gift card websites.

Check reviews of any website you use.

Always review gift card balances before and after purchasing the card.

If you are selling a gift card, don’t ever give out the card’s PIN until your payment transaction is complete.

Be wary of auction sites selling gift cards at a discount or in bulk.

If you are buying a gift card in a store, examine the protective scratch-off area on the back of the card for evidence of tampering.

Beware of social media postings offering vouchers or gift cards: Fraudulent messages can sometimes appear to have been shared by a friend when they really come from a scam artist.

Gift Card Phone Scam

A fraudster claims to be with a federal or state agency and is calling about a fake debt. The callers tries to pressure you for payment through a prepaid gift card and may threaten you with punishment if you do not comply. Keep in mind that NO government agency or reputable business will EVER ask for payment with gift cards.

Protect yourself against gift card phone scams:

If you field a call from someone insisting he or she is a government official, but the individual demands payment through a gift card, hang up.

Do not read or text the PIN number on the back of a gift card to anyone as scammers can use the number like they can use cash.

Reputable businesses don’t rely on gift cards for payment.

Other kinds of scammers, some of them also imposters, who might demand payment by gift card include:

callers pretending to be from a utility company, telling you to pay your bill by gift card or they’ll cut off your power or water.

someone posing as a military service member to get your sympathy, saying he has to sell something quickly before deployment and needs you to pay by gift card.

callers who say you’ve won a so-called prize, for a sweepstakes you probably never entered – but first, you have to use a gift card to pay fees or other charges.

someone buying something from you, probably online, who sends a check for more than the purchase price – and asks you to give them the difference on a gift card.

Protect yourself from gift card fraud:

Don't buy gift cards displayed prominently within the store. Ask
sales clerks to sell you cards from the back room or behind the customer
service desk.

Examine cards and packaging for signs of tampering. Don't buy a
card where the coating covering the PIN number has been scratched away or
the activation sticker isn't firmly affixed.

Spend the gift card as soon as possible. Don't put the card in a
drawer for months. The longer consumers take to spend their gift cards, the
more time thieves have to do it for them.

Beware of online exchanges and auction sites. Online buy cards
from reputable online exchanges or auction sites because of the possibility
of buying stolen cards.

If you purchase gift cards to give as gifts, ensure they come from a reputable and trusted source.

Consider gift cards the same as cash and secure them like you would your wallet.

Prepaid Cards

Types of crimes:

Fraudsters can purchase prepaid cards with stolen credit card information. Most prepaid card providers have established law enforcement escalation numbers, that can be reached by calling the phone number listed on the back of the prepaid card and requesting the law enforcement or fraud/risk hotline.

Another type of fraud occurs if you receive a credit, debit or prepaid card in the mail (other than a renewal of an existing card) which you did not request or apply for the specific card. This can indicate that you may be a victim of identity theft fraud.

Report Gift Card Scams

What if you paid a scammer with a gift card? If you paid a scammer with a gift card, tell the company that issued the card right away. When you contact the company, tell them the gift card was used in a scam. Ask them if money is still on the card, and if they can refund your money. If you act quickly enough, the company might be able to get your money back. Be aware that some companies will not return any money even if the gift card hasn't been used. Remember to keep the gift card itself, and keep the gift card receipt. Also, tell the store where you bought the gift card as soon as possible.

Here is a list of cards that scammers often use – with information to help report a scam. If the card you used is not on this list, you might find the gift card company’s contact information on the card itself.